With uncertainty gripping the power sector following the coal mine allotment scam Bharat Heavy Electricals Ltd (BHEL), which is poised to witness cancellation of orders worth over Rs 21,000 crore, is now considering spreading its risk by growing its non-power business.
Several power companies under the scanner have asked BHEL to put their orders on hold, and this could impact the company’s profits. This is in addition to the steep competition from private players and Chinese power equipment suppliers that it faces.Rather than concentrating wholly on the power sector, BHEL would now enhance its industrial, transportation, piping, refinery and transmission and distribution businesses. At present, power accounts for 70% of the company’s revenue while the remaining balance is from non-power. This ratio would change to 60:40 in the next few years, with thenon-power business growing to 60%, officials said.
“This is the need of the hour. We have decided to grow our industrial, oil & gas and transportation businesses. By October we will know how many orders would be cancelled. We have to keep our employees engaged,” said AV Krishnan, Executive Director (Trichy Complex) BHEL.
“As a company, we see opportunity in locomotive business. Transportation can contribute more revenue as every city would be having metro and mono rail,” Mr Krishnan said.
BHEL plans to supply cracking towers and columns for refineries, and pressure vessels for petrochemical plants. It would also supply small industrial boilers, a business it exited years ago. The company’s piping business is also being substantially enhanced.
The correspondent was in Tiruchirapalli at the invitation of the company.